Amicus Curiae Brief — Joseph R. Biden, Jr., President of the United States, et al., Applicants v. Missouri, et al.

Supreme Court briefAug 19, 2024

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No. 24A173

_________________________ _______________________

IN THE

Supreme Court of the United States

JOSEPH R. BIDEN, JR., PRESIDENT OF THE UNITED STATES, ET AL.,

Applicants,

STATE OF MISSOURI, ET AL.,

Respondents.

_________________________ ________________________

On Application to Vacate the Injunction Pending Appeal

Entered by the United States Court of Appeals for the Eighth Circuit

AMICUS CURIAE BRIEF OF THE NEW CIVIL LIBERTIES ALLIANCE

IN OPPOSITION TO APPLICANTS’ REQUEST TO VACATE THE INJUNCTION

Sheng Li

Counsel of Record

Russell G. Ryan

Markham S. Chenoweth

NEW CIVIL LIBERTIES ALLIANCE

1225 19th St. NW, Suite 450

Washington, DC 20036

(202) 869-5210

sheng.li@ncla.legal

Counsel for Amicus Curiae

August 19, 2024

TABLE OF CONTENTS

TABLE OF CONTENTS ............................................................................................................ i

TABLE OF AUTHORITIES ..................................................................................................... ii

INTEREST OF THE AMICUS CURIAE............................................................................... 4

INTRODUCTION AND SUMMARY...................................................................................... 4

ARGUMENT ................................................................................................................................ 7

THE STATES HAVE STANDING IN THEIR CAPACITY AS PSLF-QUALIFYING

EMPLOYERS..................................................................................................................... 7

II. THE 1993 HEA AMENDMENTS DO NOT AUTHORIZE SAVE ..................................... 11

The 1993 HEA Amendments Require Repayment Rather than

Cancellation of Student-Loan Debt ................................................................... 11

Applicants’ Contrary Interpretation of the HEA Results in an

Unconstitutional Delegation of Legislative Power ........................................ 16

CONCLUSION .......................................................................................................................... 19

TABLE OF AUTHORITIES

Page(s)

CASES

ABA v. U.S. Dep’t of Educ.,

370 F. Supp. 3d 1 (D.D.C. 2019) .......................................................................................... 8

Am. Power & Light Co. v. SEC,

329 U.S. 90 (1946) ................................................................................................................. 17

Biden v. Nebraska,

143 S.Ct. 2355 (2023) ......................................................................................................... 4, 7

CFPB v. Cmty. Fin. Servs. Ass’n of Am., Ltd.,

601 U.S. 416 (2024)............................................................................................................... 11

Dep’t of Transp. v. Ass’n of Am. R.Rs.,

575 U.S. 43 (2015) ................................................................................................................. 17

Gundy v. United States,

588 U.S. 128 (2019)............................................................................................................... 16

Int’l Union v. OSHA,

938 F.2d 1310 (D.C. Cir. 1991)..................................................................................... 17, 18

Jarkesy v. SEC,

34 F.4th 446 (5th Cir. 2022) ............................................................................................... 17

Mistretta v. United States,

488 U.S. 361 (1989)............................................................................................................... 17

Sherley v. Sebelius,

610 F.3d 69 (D.C. Cir. 2010) ............................................................................................... 10

Whitman v. Am. Trucking Ass’ns.,

531 U.S. 457 (2001)............................................................................................................... 16

Yakus v. United States,

321 U.S. 414 (1944)......................................................................................................... 17, 19

STATUTES

20 U.S.C. § 1078 ........................................................................................................................ 14

20 U.S.C. § 1078-10 .................................................................................................................. 12

20 U.S.C. § 1087e .................................................................................................... 6, 8, 9, 11, 12

20 U.S.C. § 1098e ................................................................................................................ 12, 15

31 U.S.C. § 1301 ........................................................................................................................ 12

College Cost Reduction and Access Act of 2007,

Pub. L. 110-84, 121 Stat. 784 (2007)................................................................................. 15

Health Care and Education Reconciliation Act of 2010,

Pub. L. No. 111-152, 124 Stat. 1029 (2010)..................................................................... 15

Omnibus Budget Reconciliation Act of 1993,

Pub. L. 103-66, 107 Stat. 312 (1993)................................................................................... 5

OTHER AUTHORITIES

Adam Looney,

Biden’s Income-Driven Repayment plan would turn student loans into

untargeted grants,

Brookings, September 15, 2022 ......................................................................................... 13

Barack Obama,

Remarks by the President in State of the Union Address, Speech given before

Congress, January 27, 2010................................................................................................ 15

Cong. Rsch. Serv.,

The Federal Direct Student Loan Program (1995)........................................................ 14

Department of Education,

Secretary Cardona Statement on Supreme Court Ruling on Biden

Administration’s One Time Student Debt Relief Plan (June 30, 2023)...................... 5

Hearing of the Senate Committee on Labor and Human Resources to Amend the

Higher Education Act of 1965,

103rd Cong. (1993) .......................................................................................................... 13, 18

Matthew Chingos, et al.,

Few College Students Will Repay Student Loans under the Biden

Administration’s Proposal,

Urban Institute, January 19, 2023 ................................................................................... 13

REGULATIONS

34 C.F.R. § 685.219 .................................................................................................................... 8

Improving Income Driven Repayment for the William D. Ford Federal Direct

Loan Program and the Federal Family Education Loan (FFEL) Program,

88 Fed. Reg. 43,820 (July 10, 2023) .............................................................. 5, 9, 11, 16, 18

iii

INTEREST OF THE AMICUS CURIAE 1

The New Civil Liberties Alliance (“NCLA”) is a nonpartisan, nonprofit civil

rights organization devoted to defending constitutional freedoms from the

administrative state’s depredations. The “civil liberties” of the organization’s name

include rights at least as old as the U.S. Constitution itself, such as jury trial, due

process of law, and the right to have laws made by the nation’s elected lawmakers

through constitutionally prescribed channels (i.e., the right to self-government).

NCLA is keenly interested in this case because it involves a profoundly troubling

assertion of administrative power and raises critically important issues of

constitutional and administrative law. NCLA was one of many commenters that

objected to the proposed Department of Education (“Department”) rule that

ultimately established the unauthorized Saving on a Valuable Education (“SAVE”)

student-loan plan, which is the central focus of this case.

INTRODUCTION AND SUMMARY

On June 30, 2023, before the ink dried on this Court’s decision in Biden v.

Nebraska, 143 S. Ct. 2355 (2023), which invalidated the Department’s plan to cancel

$430 billion in federal student loans by unlawfully rewriting the HEROES Act of

2003, the Secretary of Education announced a new and equally unlawful debt-

1 No counsel for a party authored this brief in whole or in part, and no counsel or

party made a monetary contribution intended to fund the preparation or submission

of this brief. No person other than amicus or its counsel made a monetary contribution

to its preparation or submission.

cancellation scheme. 2 Ten days later, the Department published a final rule

establishing the so-called SAVE repayment plan, entitled Improving Income Driven

Repayment for the William D. Ford Federal Direct Loan Program and the Federal

Family Education Loan (FFEL) Program, 88 Fed. Reg. 43,820 (July 10, 2023). SAVE

cited amendments made to the Higher Education Act by the Omnibus Budget

Reconciliation Act of 1993, Pub. L. 103-66, 107 Stat. 312, 347–48 (1993) (“1993 HEA

Amendments”), in a manner that transforms the income-contingent loan-repayment

plans that Congress authorized into loan-cancellation plans that Congress did not

authorize. The SAVE plan would wipe out $475 billion of student-loan debt owed to

the U.S. Treasury and shift that debt to taxpayers who either never went to college,

depleted personal savings to pay for college, or borrowed for college and responsibly

repaid their loans. It would do so by dramatically lowering participating borrowers’

monthly payments—to zero in many cases—and then forgiving their loan balances at

the end of the repayment period, which is typically 20 years. SAVE would also halt

the accrual of interest on certain student loans, which is the equivalent of cancelling

loans in the amount of interest that otherwise would have accrued.

A group of States challenged SAVE in the Eastern District of Missouri, and the

district court preliminarily enjoined the Department from cancelling any student

loans under SAVE while leaving in place SAVE’s lower monthly payments and

nonaccrual of interest. App.76a. Despite the partial injunction, the Department

2 See Department of Education, Secretary Cardona Statement on Supreme Court

Ruling on Biden Administration’s One Time Student Debt Relief Plan (June 30,

2023).

continued to cancel student loans under a “hybrid” plan that combined aspects of

SAVE that were not enjoined, such as lower monthly payments and nonaccrual of

interest, with a prior income-contingent repayment program known as REPAYE.

App.4a. The Eighth Circuit granted an injunction pending appeal that, with respect

to borrowers whose loans are governed by SAVE provisions, prevents Applicants from

forgiving federal student loans (including through REPAYE), from waiving accrued

interest, and from implementing SAVE’s lower-payment provisions. App.9a.

The Court should not disturb the Eighth Circuit’s injunction because

Applicants are unlikely to succeed on the merits by showing that States lack Article

III standing or that the 1993 HEA Amendments authorize SAVE. In addition to

injuries found by the court below, SAVE further injures the States by undermining

the competitive advantages Congress bestowed on them through the Public Service

Loan Forgiveness (“PSLF”) program, which incentivized student-loan borrowers to

seek and maintain employment with state government agencies. See 20 U.S.C.

§ 1087e(m)(3)(B)(i) (creating PSLF incentives for workers in “public service” jobs).

Loss of that competitive advantage would inflict a separate concrete injury against

all the States in their capacity as employers needing to recruit and retain collegeeducated employees. This competitive injury, which the States raised below, confers

subject-matter jurisdiction that allowed the court below to halt the Applicants’

unconstitutional attempt to rewrite laws and cancel debt owed to the Treasury.

Applicants’ statutory argument based on the 1993 HEA Amendments is

meritless. That law merely allows the Department to establish repayment plans over

a longer period of time so that individual monthly payments could be smaller for

lower-income borrowers. Nothing in the 1993 HEA Amendments’ text nor legislative

history suggests Congress granted the Department boundless discretion to design

plans like SAVE that prioritize the cancellation of loans instead of their repayment.

Indeed, if the 1993 law granted such power, it would be unconstitutional because it

contains no intelligible principle to guide the Department’s discretion regarding how

generous it can make repayment plans. Otherwise, the Department could design a

plan that cancelled virtually all federal student loans, or none at all, or anything in

between. Such unfettered discretion clearly violates the Constitution’s vesting of all

legislative powers in Congress.

ARGUMENT

I. THE STATES HAVE STANDING IN THEIR CAPACITY AS PSLF-QUALIFYING EMPLOYERS

The courts below correctly held that the States have standing because their

allegation

regarding

injuries

state

loan-servicing

instrumentalities

are

“substantially similar to, if not identical to, those the Supreme Court held were

sufficient to establish Missouri’s standing just last year in Biden v. Nebraska, … 143

S. Ct. 2355 (2023),” App.6a. But even if that were not so, the States would still have

standing in their capacity as public-service employers. 3 As the States argued below,

3 In addition to state agencies, other PSLF-qualifying public-service employers, such

as Section 501(c)(3) nonprofit organizations, are also injured by student-loan

cancellation that erodes borrowers’ financial incentive under PSLF to work at such

employers. As such, those other PSLF-qualifying employers have Article III standing

to challenge the Department’s unlawful loan-cancellation schemes. Recognizing such

standing would deter the Department from repeatedly attempting to unlawfully

SAVE injures them as employers by undermining recruitment, shrinking the PSLFsubsidized labor pool, and thus increasing labor and recruiting costs. See Dkt. 1

(Complaint) ¶¶ 129–145; see also Dkt. 10 (Pl.’s Mem. Supp. Mot. for Stay) at 25–28.

Congress established PSLF in 2007 to encourage student-loan borrowers who

owe outstanding student-loan debt to seek and maintain public-service employment,

including with state-government agencies. 20 U.S.C. § 1087e(m)(3)(B)(i). PSLF does

this by promising borrowers that their outstanding loan balances will be completely

cancelled after 120 monthly payments (10 years) while working at qualifying

employers. Id.; see also 34 C.F.R. § 685.219. Because of PSLF, all else being equal,

working for a qualifying employer is more financially advantageous to student-loan

borrowers than working at the same pay (or even higher pay) at a nonqualifying

employer.

By offering these incentives to student-loan borrowers in the job market,

Congress purposefully gave qualifying public-service employers (and only them) a

valuable advantage over nonqualifying employers in competing to recruit and retain

college-educated talent. PSLF benefits public-service employers “by providing

significant financial subsidies to the borrowers they hire,” thereby “increasing

recruitment and lowering labor costs.” ABA v. Dep’t of Educ., 370 F. Supp. 3d 1, 19

(D.D.C. 2019). The Department’s own regulations acknowledge that PSLF was

expressly created for the benefit of public-service employers. 34 C.F.R. § 685.219(a).

cancel federal student-loan debt on the mistaken belief that no one has standing to

stop it.

So, government action that eliminates or reduces state employers’ statutory

competitive advantage via PSLF inflicts an economic injury that confers standing.

States are PSLF-qualifying employers and thus are among the employers that

Congress benefitted through PSLF incentives. See 20 U.S.C. § 1087e(m)(3)(B)(i).

State agencies rely on the ability to enable loan forgiveness to attract and retain

college-educated employees who would otherwise be enticed to take higher-paying

private-sector jobs. SAVE undermines PSLF benefits that States rely on by cancelling

debt for all participating borrowers who take out $12,000 or less after they make 10

years of monthly payments—regardless of whether they work for public service

employers or not. 88 Fed. Reg. at 43,820. Because these borrowers get their entire

loan balance forgiven after 10 years, regardless of where they work (or whether they

work at all), they no longer have an economic incentive under PSLF to seek or

continue employment with public-service employers like state agencies.

Consider a recent graduate who stands to earn $10,000 in PSLF forgiveness on

top of his normal salary after working ten years at a state agency, which works out

to extra compensation of $1,000 per year. This PSLF-deferred compensation means

it costs the state agency, for example, only $59,000 annually in salary and benefits to

offer $60,000 in effective annual compensation, as compared to for-profit employers

that are not PSLF-eligible. But SAVE cancels the same graduate’s $10,000 loan

balance after ten years of monthly payments, even if he never holds a public-service

job. The state agency no longer benefits from PSLF’s $1,000 per year wage subsidy in

its competition against for-profit employers to recruit or retain that graduate. To

remain equally competitive as an employer, the agency’s labor cost must increase by

$1,000 per year to match the effective compensation it provided to the employee

before SAVE. While the magnitude of this increase is different—and more complex to

calculate—if present value, tax effects, inflation, and the like were to be considered,

the direction of the effect remains the same: state agencies’ labor costs rise. Being

forced by Applicants’ unlawful action to “invest more time and resources” to

successfully recruit employees “is an actual, here-and-now injury.” Sherley v.

Sebelius, 610 F.3d 69, 74 (D.C. Cir. 2010).

Such injury extends to retention of employees. Consider next a current state

employee who had an original loan balance of $10,000 and has been making monthly

payments while working in public service for the past eight years. Without SAVE,

she would have a financial incentive to stay in public service for two more years so

she could get the remaining balance of her loans forgiven under PSLF. However,

because of SAVE, she would get her debt canceled after two more years of monthly

payments regardless of where she works. She can thus switch to a higher-paying, forprofit job without any negative repercussions on her eligibility for debt cancellation.

SAVE thus completely negates recruitment and retention benefits that PSLF

deliberately conferred on state employers with respect to borrowers affected by the

10-year forgiveness provision. The loss of this competitive advantage in the labor

market inflicts direct and immediate competitive harm on the States as employers,

which satisfies the injury-in-fact requirement for Article III standing.

II. THE 1993 HEA AMENDMENTS DO NOT AUTHORIZE SAVE

A. The 1993 HEA Amendments Require Repayment Rather than Cancellation of

Student-Loan Debt

Applicants claim SAVE is authorized by the 1993 HEA Amendments, which

provide in relevant part that “income contingent repayment shall be based on the

[borrower’s] adjusted gross income,” and must “not … exceed 25 years.” 20 U.S.C.

§ 1087e(d)(1)(D), 1087e(e)(2). According to Applicants, the statute requires “only that

payments must be set based upon the borrower’s annual adjusted gross income,” 88

Fed. Reg. at 43,827, “for the duration of the prescribed period and then [the

Department] forgives any outstanding balance at the end of that period.” Applicants’

Br. 23. Applicants admit no limiting principle to govern how low monthly payments

may be or how short the repayment period can be set. If Applicants’ view were

accepted, the Department could, for instance, set the monthly payment cap at 1

percent of income over $1 million, so that nearly all loans would be cancelled rather

than repaid at the end of the repayment term. It could also shorten the repayment

period to just one year or even one day, so loans are cancelled almost immediately.

Such boundless interpretation runs afoul of the 1993 law’s plain text, which

calls for “repayment” of debt with no mention of any authorization to cancel debt owed

to the Treasury. See 20 U.S.C. § 1087e. Any cancellation of federal student-loan debt

gives away “money otherwise destined for the general fund of the Treasury” and thus

involves an appropriation of funds. CFPB v. Cmty. Fin. Servs. Ass’n of Am., Ltd., 601

U.S. 416, 425 (2024). Congress made clear that a “law may be construed to make an

appropriation out of the Treasury … only if the law specifically states that an

appropriation is made[.]” 31 U.S.C. § 1301(d). Hence, when Congress authorizes debt

forgiveness, it typically uses explicit language. See, e.g., 20 U.S.C. § 1078-10(b) (“The

Secretary shall … assume[] the obligation to repay a qualified loan” for qualifying

teachers); § 1087e(m)(1) (“The Secretary shall cancel the balance of interest and

principal due …” for borrowers who satisfy PSLF); § 1098e(b)(7) (“the Secretary shall

repay or cancel any outstanding balance …” of eligible borrowers).

The lack of similarly explicit language in the 1993 income-contingent

repayment provisions confirms that Congress did not authorize the Department to

establish repayment plans that are designed to cancel debt. 4 Rather, the 1993 law

requires the Department to establish plans that provide for eventual repayment of

debt, albeit along a longer time horizon, “not to exceed 25 years,” 20 U.S.C.

§ 1087e(d)(1)(D), so that monthly payments can be smaller for borrowers with lower

income.

Then-Deputy Secretary of Education Madeline Kunin explained to Congress

in 1993 that income-contingent repayment would be cost-neutral in the long run: “As

to what the cost of [these plans] would be, we see it as a wash” because the

government “would eventually get paid” and “[t]here would be interest charged on

that, so it isn’t like [borrowers] are getting a free ride.” Hearing of the Senate

4 The States relied on the Major Questions Doctrine to make a similar argument that

a clear statement is needed to authorize the mass cancellation of student loans. Dkt.

10 at 25–28. Amicus NCLA agrees but notes that it is not necessary to invoke the

Major Questions Doctrine because 31 U.S.C. § 1301(d) already provides that a clear

statutory statement is needed to authorize the expenditure of funds from the

Treasury to pay for student-loan debt cancellation. No such statement exists here.

Committee on Labor and Human Resources to Amend the Higher Education Act of

1965, 103rd Cong. 48 (1993). 5 Cost neutrality is obviously incompatible with granting

the Department authority to design a repayment plan that ends up forgiving most

loans. 6 To be sure, Deputy Secretary Kunin acknowledged that some small portion of

loans might become uncollectable at the end of the payment period and “the Secretary

will make some designation as to when you call it quits and [borrowers] are forgiven.”

Id. As any participant in the loan industry knows, writing off some bad loans is an

unavoidable part of the business. But such write-offs are not the goal—repayment is.

Applicants correctly note that an income-contingent repayment plan contains

two essential principles: (1) the monthly payment cap must be based on income—with

no stated minimum amount; and (2) the repayment term must not exceed 25 years—

with no stated minimum length. Applicants’ Br. 23. However, they mistakenly

conclude that the 25-year limit exists to effectuate forgiveness at the end of the term.

Id. According to Applicants, Congress authorized the Department to cancel

outstanding loans after a certain repayment period set by the Department but

somehow failed to prescribe a minimum term. That means the Department could

shorten the repayment term as much as it likes—to one year or even one day—so all

5 Available at: https://files.eric.ed.gov/fulltext/ED363187.pdf.

6 Analysts at the Brookings Institution and the Urban Institute estimate that SAVE

would cancel 50 percent or more of participants’ student-loan debt. Adam Looney,

Biden’s Income-Driven Repayment plan would turn student loans into untargeted

grants, Brookings, September 15, 2022. Matthew Chingos, et al., Few College

Students Will Repay Student Loans under the Biden Administration’s Proposal,

Urban Institute, January 19, 2023.

student loans are immediately cancelled. Such an interpretation is wrong, inter alia,

because Congress could not have granted such unfettered power and discretion to an

agency. See infra, Argument II.B.

Rather, the lack of a minimum repayment period makes sense only if Congress

authorized income-contingent repayment plans as loan-repayment plans, not loancancellation plans. If the term is short, then monthly payments must be relatively

high to ensure repayment. Only by lengthening the term can the Department lower

the monthly payment for lower-income borrowers while ensuring eventual

repayment. Indeed, the standard repayment plan called for full repayment within 10

years with relatively high monthly payments. See 20 U.S.C. § 1078(b)(9). Incomecontingent repayment plans could offer lower monthly payments only if the

repayment period exceeds 10 years. Hence, Congress needed only to prescribe a

maximum length, not a minimum, for income-contingent repayment plans.

By limiting the maximum term to 25 years, Congress also limited the extent

to which the Department could lower monthly payments—they cannot be so low that

repayment is not feasible within the 25-year term. Consistent with this

interpretation, the Department’s original income-contingent plan allowed a

borrower’s monthly payment to be capped at 20 percent of income above the federal

poverty line. Cong. Rsch. Serv., The Federal Direct Student Loan Program 10 (1995). 7

A lower monthly payment, like the one offered under SAVE, would result in a plan

that is not designed to achieve repayment within the maximum 25-year term. It

7 Available at: https://files.eric.ed.gov/fulltext/ED378875.pdf.

would impermissibly prioritize debt cancellation over the statutory text requiring the

Department to ensure debt “repayment.”

Subsequent legislation reinforces this conclusion. Because the original

income-contingent repayment plan based on the 1993 HEA Amendments was seen as

insufficiently generous, Congress enacted the College Cost Reduction and Access Act

of 2007 (“CCRA”), Pub. L. 110-84, 121 Stat. 784 (2007), which authorized incomebased repayment plans that reduce monthly payments to 15 percent of income above

150 percent of the poverty line. 20 U.S.C. § 1098e(a). Unlike the 1993 law, CCRA

contained explicit language authorizing loan cancellation after 25 years of payments.

Id. at § 1098e(b)(7). Believing even more generosity was needed, President Obama

urged Congress in his 2010 State of the Union address to lower the payment cap to

“only 10 percent of their income [above 150 percent of the poverty line]” and to shorten

the payment period so “all of their debt will be forgiven after 20 years.” Barack

Obama, Remarks by the President in State of the Union Address, Speech given before

Congress, at 5, January 27, 2010. 8 Congress obliged and enacted these 10-percent

and 20-year proposals in the Health Care and Education Reconciliation Act of 2010,

Pub. L. No. 111-152, 124 Stat. 1029, § 2213 (2010) (HCERA), codified at 20 U.S.C.

§ 1098e(e).

The 2007 CCRA and the 2010 HCERA make no sense if the 1993 HEA

Amendments already authorized the Department to unilaterally design an even more

8 Available at: https://www.govinfo.gov/content/pkg/DCPD-201000055/pdf/DCPD-

201000055.pdf.

generous repayment plan like SAVE. SAVE reduces monthly payments to only five

percent of income in excess of 225 percent of the poverty line, 88 Fed. Reg. at 43,820,

resulting in far more debt being cancelled instead of being repaid at the end of the

20-year repayment period as compared to HCERA. It also reduces the payment period

to only 10 years for certain borrowers, id., which further increases the amount of debt

cancelled rather than repaid. If the Department has had unfettered discretion since

1993 to lower monthly payments and to shorten the repayment term of incomecontingent repayment plans, as it now claims, then why did Congress and President

Obama previously consider it necessary to enact and push legislation to authorize far

less generous income-based repayment relief? The obvious answer is that the 1993

law was never before understood to allow the Department to establish a repayment

plan that is more generous than what Congress explicitly authorized by HCERA. Nor

did that law allow the Department to halt the accrual of interest on student loan

balances, as Applicants now argue. Br. at 31–32.

B. Applicants’ Contrary Interpretation of the HEA Results in an

Unconstitutional Delegation of Legislative Power

The Department’s contrary interpretation of the 1993 HEA Amendments to

authorize SAVE must be rejected as an unconstitutional delegation of legislative

power. “Article I, § 1, of the Constitution vests all legislative powers herein granted

… in a Congress of the United States. This text permits no delegation of those

powers.” Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 472 (2001) (cleaned up).

Accordingly, “Congress … may not transfer to another branch ‘powers which are

strictly and exclusively legislative.’” Gundy v. United States, 588 U.S. 128, 135 (2019)

(quoting Wayman v. Southard, 23 U.S. (10 Wheat.) 1, 42–43 (1825)). The Supreme

Court’s formulation of that longstanding rule states that Congress may grant

regulatory power to an agency only if it provides an “intelligible principle” by which

the agency must exercise it. Mistretta v. United States, 488 U.S. 361, 372 (1989)

(quoting J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409 (1928)).

While the intelligible-principle test has been criticized as unduly lax, 9 it still

demands the articulation of objective principles that allow courts to test whether the

agency has faithfully executed Congress’s command. Am. Power & Light Co. v. SEC,

329 U.S. 90, 105 (1946); Yakus v. United States, 321 U.S. 414, 426 (1944) (delegation

would be unconstitutional if “it would be impossible in a proper proceeding to

ascertain whether the will of Congress has been obeyed”). Thus, a statute that

delegates to an agency “unfettered discretion” to make policy choices is

unconstitutional. Jarkesy v. SEC, 34 F.4th 446, 460–61 (5th Cir. 2022), affirmed on

other grounds sub nom., SEC v. Jarkesy, 2024 WL 3187811 (U.S. June 27, 2024); see

also Int’l Union v. OSHA, 938 F.2d 1310, 1317 (D.C. Cir. 1991).

Here, the Department claims that the 1993 HEA Amendments conferred

unfettered discretion on the Secretary to invent whatever student-loan repayment

plans he wishes. The Department says the explicit minimum-payment provisions

that Congress enacted in 2007 and updated in 2010 do not bind it. Instead, the

9 Dep’t of Transp. v. Ass’n of Am. RRs, 575 U.S. 43, 77 (2015) (Thomas, J., concurring)

(explaining that the intelligible-principle “test [that courts] have applied to

distinguish legislative from executive power largely abdicates [the judiciary’s] duty

to enforce that prohibition [against legislative delegation].”).

Department argues it can design a repayment plan with even lower monthly

payments and a shorter repayment period such that very little debt will have been

repaid by the end of the repayment period, at which point the substantial remaining

balance is cancelled and debt transferred to taxpayers.

In Applicants’ view, “[t]he statute … gives the Secretary discretion as to how

much a borrower must pay, specifying only that payments must be set based upon

the borrower’s annual adjusted gross income[.]” 88 Fed. Reg. at 43,827. Thus, they

claim the same 1993 text authorizes both the original income-contingent plan that

was expected to be cost-neutral in the long run 10 and the new $475 billion SAVE

plan—and presumably anything in between.

SAVE’s exorbitant price tag is not even the theoretical upper limit. If the only

requirement is for payments to be based on income, as Applicants claim, then the

Department could lower the payment cap to just one percent of income above $1

million, which would result in debt cancellation after zero payments from the vast

majority of borrowers. Nearly all student-loan debt would remain unpaid and then

cancelled after 20 years. Applicants’ capacious view would also allow the Department

to reduce the repayment period to 10 years—or even shorter—to further maximize

debt cancellation. Conversely, it could promulgate a payment cap equal to 100 percent

of income above $1, which would not reduce the monthly payment for any borrower

who works for a living. Such unfettered discretion would plainly amount to an

unconstitutional delegation of legislative power. Int’l Union, 938 F.2d at 1317

See supra Kunin Testimony.

(rejecting on nondelegation ground agency’s assertion of authority “to require

precautions that take the industry to the verge of economic ruin … or to do nothing

at all.”). Even the lax intelligible-principle test cannot support the Department’s

boundless interpretation because “it would be impossible in a proper proceeding to

ascertain whether the will of Congress has been obeyed.” Yakus, 321 U.S. at 426.

Applicants’ view of the Department’s power is therefore untenable and must be

rejected.

CONCLUSION

For the foregoing reasons, Applicants are unlikely to succeed on the merits,

and the Court should deny their request to vacate the Eighth Circuit’s injunction

pending appeal.